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ASK THE EDD LAWYER - TIPS ON CHOOSING A QUALIFIED TAX REPRESENTATIVE WHEN DEALING WITH THE EDD OR IRS

By Robert S. Schriebman
April 13, 2016

Introduction

The importance of choosing a qualified and honest tax representative cannot be over emphasized. An incompetent representative handling an EDD audit can result in a gross and unfair assessment with many punitive penalties. An incompetent or dishonest IRS representative can cause you to be audited. You might even lose your tax refund to embezzlement.

On March 23, 2016 the IRS issued Press Release IR-2016-46 that discussed online tools to help you chose a qualified tax professional. Taxpayers can use IRS.gov/chooseataxpro website that includes a list of consumer tips for selecting a tax professional.

The IRS Commissioner's Warning

IRS Commissioner John Koskinen pointed out that the filing of a federal income tax return may represent one of the biggest financial transactions of the year. He said, "Choose your tax return preparer carefully because you entrust them with your private financial information that needs to be protected."

Basic Tips On Selecting A Tax Professional

In the introduction I pointed out that an incompetent representative engaged in an EDD audit can be disastrous. Usually these people play games with the EDD causing the auditor frustration and consternation. This can result in an accurate assessment or an estimated assessment. An estimated assessment cannot be settled and must be brought before a CUIAB judge.

The tips provided in the new IRS Press Release can also apply to selecting an EDD representative. These include the following:

  • Ethics is the prime factor. You are going to be entrusting vital personal and business information and data to your tax professional. This may include information about your income, your investments, and your social security numbers as well as your EDD account number.
  • If you are hiring a professional to prepare any tax return - individual, corporate, or employment taxes, make sure the preparer signs the return and includes their Preparer Tax Identification Number (PTIN). All paid preparers are required to have a valid PTIN.
  • Never sign any tax return without reviewing it first. If there is anything you do not understand - ask before you sign.
  • If you are asked to sign a blank return - run!
  • Make sure your refund is sent to you directly or deposited into your bank account. Do not allow any representative to receive and negotiate your refund. Avoid being a victim of embezzlement.

Additional Information From The IRS

You can obtain the following publications from the IRS website:

  • Who can represent you before the IRS?
  • What are the red flags? IRS tips for choosing a tax preparer
  • When, and how, do I file a complaint about a tax preparer?

Conclusion

An EDD audit handled by an incompetent representative can cause huge professional fees to unravel. The EDD may not want to reopen the audit and leave you to the mercy of a CUIAB judge.

An improper income tax return containing phony deductions for the failure to report income properly can cause the IRS to audit all of the preparer's clients including you.

If your preparer steals your return, it is not the IRS' fault. You chose the representative.

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Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 40 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.

Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See "California Tax Collection Practice and Procedures" and "California Taxation Practice and Procedure," both published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, "IRS Tax Collection Procedures - A Manual for Practitioners" published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, "IRS Tax Collection Procedures - A Manual for Practitioners" published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See "California Tax Collection Practice and Procedures" and "California Taxation Practice and Procedure," both published by Commerce Clearing House.

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